Shopper power notes slide deck no voice over 3.0

Editor's Notes

• #2: Hi! This is Keith Scovell. I’m going to share with you today my belief that the shopper is growing in power and that power is accelerating.   Some suggestions for thinking about what it means to you. Shoppers are now living in the internet/web and are out ahead of the business!
• #3: So in following, I’m going to give you my perspective of the shifts of power in the industry, provide you overview of customer shopper applications, my view of the sea change & outlook over the next 5- 10 years, some suggestions for moving forward and then my Sources Acknowledgements and Links.   Of note – my focus is on North America and even though on-line is growing, given that the lion’s share of business in Grocery, Household Products and Health & Beauty is still done in brick & motor – I am discussing the social mobile shopper primarily in this context.
• #4: Looking back - Without a doubt the single biggest impact and shift in power was the entry of Walmart in 1988 into grocery. In less than 20 years they have become the single largest grocery retailer – exerting pressure on CPG companies through pricing, packaging requirements and distribution. Top Ten Retailers command almost 70% of today’s grocery business.
• #5: Just like in the retail industry, the CPG industry consolidated, creating larger and fewer CPG manufacturers, through multiple waves of mergers and acquisitions. Increasing scale and restructuring operations to optimize efficiency through shared services and common business information system platforms.   Engagement with the retailers increased, power began to be shared across the channel. Manufacturers grew trade marketing, established retail account management teams and started to perform category management for the key retailers.   In 2005 the simple and effective message by Proctor and Gamble – “the first moment of truth” helped to bring focus on winning at the shelf with the shopper; focused on getting the right product on the right shelf at the time the shopper was ready to purchase. Shopper marketing resurfaced as the key to winning with retailers for mutual customers. Walmart’s development to sharing point of sale data with manufacturers - Retailink - started a retail industry wide effort to begin using point of sale to help improve merchandising and replenishment. The concept of demand driven supply chain and it’s execution evolved from older and similar efficient consumer response initiatives.
• #6: Starting in the mid to late 90’s the power began to shift even more to the shopper as she had more choice - more store formats, more products, private label and access to online shopping. Shopper on the internet – content is becomes important.   Recognition that neither the CPG Supplier or the Retailer had control of the shopper – serving the shopper becomes more important –teamwork begins to improve across the Supplier and Retailer.
• #7: In 2010 - The shopper has real control and power. She is now – “in the internet” and not just “on the internet” any longer with new and greater capabilities to pull what she needs, when she needs it, information on what deals are to be had and where the deals are, what discount coupons she can get and receive instantly – at home and while in-the-store, what her friends are suggesting or recommending and getting answers to her questions from friends and others. Not from the retailer or brand owner! While the PC Internet is completely divorced from the physical world, mobile breaks down these walls and brings the power of the Internet into the real world in real time to the shopper. Context becomes important!   New thinking on shopper marketing emerges – this idea of the zero moment of truth emerges with the adoption of Facebook, Google, Bing, Search and Evaluation, Twitter, YouTube, QR codes, Microsoft Tags and shopping applications, this helps to create a new decision moment for the shopper. This zero moment of truth as Dana Howell CEO for Saatchi and Saatchi X says “influences which brands make the shopping list, where shoppers choose to buy and with whom they share the results. It is up to us to us to join the conversation at this new moment, where the decisions are being made and to provide the information the shoppers naturally crave and in all ways they are crave it.”
• #8: From sun up to sun down she is on - living in the internet. Shoppers now extend and communicate with their communities.   As Kim Cadillac World Vice President Global Marketing Group, Johnson & Johnson describes this change in the mental model “we are entering an age of change we now have to engage people in a way that is useful or helpful to their lives. The shoppers are looking to satisfy their needs. We have to be there to help them with it, to put it another way, how can we exchange value instead of just sending a message?”   From a 2005 Trip Management study done by Unilever - it showed that the type of trip the shopper plans to make and what time of day it is, is now the single greatest determinative of where she will shop - quick trip, fill in, major stock up, day time or after work – this will determine which format she will shop - supercenter, grocery, rx, club and convenience.   Connecting the zero moment of truth and the first moment of truth is critical if you are going to serve the shopper. If brand and retailers can help the shopper to select which store and intent to buy a certain brand product - then the product needs to be there at the shelf when she is ready. Deliver on the promise - Moving to store level planograms ensuring compliance and keeping the shelf fresh at the store level is a large and complex challenge which requires real time information and both CPG and retailers to work as joint partners.   As the shopper travels through her journey – she and her family consume the product – the second moment of truth - and this experience can be and is shared today in near real time through social media. Listening and responding to shoppers is critical to helping her share a positive experience with other shoppers beginning their journey - to help influence new evaluation decisions for your brands and retail stores, while at the same time reducing negative opinions and experiences by making the shopper whole.   Content and Context now becomes the driving force to connect and engage the shopper throughout her daily journey.
• #9: After 20 years of web usage and growth we are in a new stage – a sea change – living in the internet/web. Growing and accelerating through social and mobile to deliver content in context – we are aided by new infrastructures and services, with the cloud - the application and device management backbone needed to scale to and support billions of connected objects in real time anywhere.   The recent rapid adoption rate of smartphones and Ipads has been nothing short of phenomenal! Mobile is perhaps one of the most exciting and revolutionary forms of media to flourish over the last decade, as it builds exponentially on the groundbreaking changes brought on by search and social. there will be 788 million mobile-only internet users around the world by 2015 close to a billion smartphones will be shipped worldwide by 2015   Social Mobile Shopper is outpacing the business and it has become the Wild West!
• #10: When you list all of the activity taking place – it becomes obvious that we are now living in the internet – These stats were sourced by HubSpot and you can access them on the blog link below – One observation shared by Jack Neff , Advertising Age - “How Brands Should Think About Facebook: its more a Loyalty Program - 117 Brands Have at Least a Million fans, With 40 More on Pace to Join This Year” Research by DDB Worldwide and Opinionway Research finds 84% of a typical brand's Facebook fans are existing customers. That makes marketing to the fan base much more like a customer relationship management program than a customer-acquisition tool for most brands, said Justin Kistner, social-media products director of web analytics firm Webtrends. "Search is a customer-acquisition tool," Mr. Kistner said. "Facebook really isn't." But while search is largely about people discovering new products and brands, Facebook "is really about staying in touch with the people we know," whether that be real people or brands and customers, Mr. Kistner said. From Carolyn Everson, vice president of global marketing solutions Facebook inn Shopper Marketing September 2011 - “As Facebook has evolved over the last seven years, we’ve talked about building what we call the “social graph,” which is distinct from saying we are a social network. What the graph essentially does is connect people, family, friends, places and brands – increasingly so. People really love to share their favorite brands and product recommendations, and that occurs very naturally on Facebook. We think that’s a great advantage for CPG companies.” Word of Mouth on digital and mobile. Facebook already has fast eclipsed that other staple of digital loyalty programs, the brand website, with visits to the average website of a Fortune 100 company down 23% last year from a year ago, Mr. Kistner said. Fan counts of brands such as Starbucks or Coke are now 10 to 100 times higher than their websites' monthly unique visitor counts. Limitations or no, Facebook is by far the highest priority in social-media marketing, Mr. Kistner said. In all, he cited figures showing 51% of people in the U.S. have Facebook accounts, compared to only 8% who have Twitter accounts and 4% who have accounts with one of the geo-location networks -- whose members are almost entirely in major coastal urban centers, he said.
• #11: Following I’m going to highlight 8 shopper oriented application examples. First, the use of social communities, second in the store, third loyalty, couponing and partners and fourth a new shopper value and virtual retail store proposition.
• #12: Hallmark was an early adopter of social around 2000, and today they are considered a company that listens to their customers from an outside–in perspective. One of the techniques Hallmark has used was to engage customers using private online communities, communities that have tailored memberships reflecting customer and shopper segments Hallmark it trying to understand. These private communities offer an environment where shoppers and consumers will share insight and have built trust with each other and the facilitator. They provide on-going feedback and deeper understanding of the shopper profiles Hallmark is trying to serve.   Diane Hessan , CEO Communiscape stated in an interview “We went ahead and our first community in November of 2000, was the Hallmark Idea Exchange for Parents, which ended up being spectacularly successful and a real breakthrough for our client and that changed everything. That was a community of moms who were there to help Hallmark innovate into the future and we tried that and it was on fire, and we’ve been working getting better at that ever since.”   Good interview and write-up on Communiscape and private communities   http://www.greenbook.org/marketing-research.cfm/interview-communispace-ceo
• #13: As part of their product launch Nexus Pro Mend decided to try the product out with actual consumers before the product launch. They thought the consumers might be skeptical about the bold claim, so they began reaching out to existing Nexus brand advocates. They asked them to accept a free sample and write an honest review about their experiences and the product passed the test. By the time Pro Mend launch each product had more than 30 reviews with an average of 4.4 – 4.7 stars and Nexus shared these reviews across all advertising channels and with major retailer websites.
• #14: Here’s a great example of using the new media that is emerging. Reese’s is leveraging the X-Box to reach the 18+ audience which does not watch TV. With media fragmentation, campaigns are being designed to engage with the consumer/shopper. Additionally, a good example of understanding your consumer/shopper segments and then tailoring your marketing
• #15: Here’s a good example of in the internet and in the store. I particularly like this because of the approach emphasis – business oriented - “not a bomb looking for a war” They were able to integrate mobile shopping to make it easier for the shopper. On March 2011, 9 weeks after the nationwide rollout of it’s mobile program payment, Starbucks had processed more than 3 million payments   myStarbucks can find an open store with a drive through, explore Starbucks whole bean coffees, find nutritional information, and build a drink. It includes integration with Facebook and Twitter (social media). NRF Mobility Retailing Blueprint 2010
• #16: The key to winning at the shelf is having a true partnership relationship between manufacturer and retailer, each bringing their understanding of the same shopper they serve. Both are bringing insight and experience to improve the shopper’s experience at the “first moment of truth” - at the shelf - and grow the category by optimizing the shelf space.   One company that has been moving to store level merchandising is Frito Lay. Always one of the leaders in the industry when it comes to using information, Frito Lay has implemented a process for their large format retailers. Much is discussed about the emerging marketing capabilities through digital, however, you must be able to execute at the shelf. Frito Lay calls this first moment of truth the “shelf connected journey”.   It includes: consumer category management, point of sale, basket data, infinity analysis, and Segmentation of shoppers, shopper behavior, video mining.   Frito Lay is bringing insights to the retailer and a growth plan for the category that they can jointly make actionable. Bringing an executable action plan based on insights is one of the most requested needs from Retailers – they have little value for insights and no plan to realize the benefits.   There are two really good web casts on this case example that I highly recommend: One is Frito Lay on the Supply Chain TV Network and the second is from Consumer Goods Technology connecting at the shelf, JDA and Cap Gemini. Both of these web casts are included in my links, in the appendix.   Stores, even less than 10 miles apart in the same channel, have unique planograms that are driven by the unique store shopper profiles. Frito-Lay’s effort started with clustering stores and associated planograms and then by working on the process and information systems, including leveraging JDA to process planograms in near real-time, Frito Lay moved to store level category management for their large retail format channel customers.   Once a year a full blow reset with multiple refreshes’ during the year. The business benefit has been increased category growth – a win-win for both Frito Lay and the large format retailer. One of the surprising outcomes that was discovered when the non-performing SKUs were removed from the planogram, about 10 to 30 percent of them, the shopper believed there was a greater selection even though the SKU count decreased - again, making the experience easier and the brand value clearer to the shopper.   Frito Lay’s elevating the performance by helping to make smarter decisions. In store compliance continues to be a challenge and efforts to increase eyeballs at the shelf are being pursued. Insights not previously available are now provided to brand teams. For example, how many Dorito brand facings are in the market by channel, by account. Additional benefits include: forward looking or predictive merchandizing and integration back through the supply chain.
• #17: Target is testing instant coupons in select stores with additional on-demand promotions planned for the future as mobile coupon enrollment grows. Final Take - Chantal Tode is assoc. editor on Mobile Commerce Daily The Text to Get instant coupon promotion is part of Target’s broader strategy of reaching out to mobile users with special offers and coupons. Enrollment in the retailer’s opt-in mobile coupon program has doubled since February of this year, according to Target. “On demand promotions such as instant mobile coupons run for a limited amount of time,” said Molly Koesnt, spokeswoman for Target, Minneapolis, MN.. “The programs themselves have run from 2 – 6 weeks,” she said. “While the promotions have a short life-span, these types of promotions will continue throughout the future.” Mobile coupons are promoted through a variety of vehicles, including Target’s weekly ad circular, in-store signage, Facebook call-outs and print magazine ads. “At Target, we recognize our guests are connected, through a multitude of mobile and social networking technologies,” said Kristy Welker, spokeswoman at Target. “By leveraging innovative technologies, we are delivering highly-relevant and differentiated shopping solutions that are personal, simple, and accessible anywhere and anytime.” Targeting customers with instant coupons while they are in-store helps retailers reach consumers when they are ready to buy. “By delivering a truly relevant and targeted offer, retailers can influence purchase decisions,” Mr. Caron said. “If retailers can impact customers when they are in the aisle with their wallets are open, they’ve done their job.” “Retailers can look at a customer’s purchase history and try to drive them to a particular area of the store where they don’t usually shop.”
• #18: “Fifteen percent of a retailer's most loyal customers can account for as much as half of its sales, says Keith Jelinek, director in the retail division of consulting firm AlixPartners. It takes between 12 and 20 new customers to replace a lost loyal customer, says Keith Colbourn, vice president, global loyalty practice leader at Dunnhumby.”   CVS is integrating mobile social media as a key aspect of their loyalty ExtraCare program – From a recent CVS case study on The ContentLab - “It was not about “buying” fans and giving them a deal, but about engaging customers based on what is important to them - savings. “ Now, retailers are devising ways to track barcode holders outside the store. CVS, which has 67 million loyalty card members, recently offered fans of its Beauty Club Facebook page a free antibacterial product. For the voucher, shoppers had to enter their ExtraCare number and email address. "That's another way for us to fingerprint the customer to give them more personalized value," said CVS's Mr. Price. More than 7,100 CVS locations have in-store coupon centers, computerized columns that, when shoppers swipe a rewards card, spit out personalized coupons. The center is designed to "influence their shopping visit that day," says Mr. Price. The deals attached to a receipt are meant to encourage another visit. In February 2010, CVS launched a twitter presence - feed for CVS/pharmacy ExtraCare deals, exclusives and savings advice from experts – even sweepstakes entries! In September 2010 – CVS launched its Facebook presence – providing a health oriented and savings capability – using Facebook as a channel to build on their ExtraCare loyalty program. In October 2010 – CVS launched applications using the iPhone(R) and other Apple mobile devices. Available as a free, downloadable application from iTunes and the Apple App Store, the CVS/pharmacy application leverages the tools available on CVS.com including managing prescriptions, planning shopping trips and even scheduling a flu shot. "We have introduced the CVS/pharmacy mobile application to give customers the ability to manage prescriptions and access important health information from any location," said Rob Price, senior vice president of marketing and chief marketing officer for CVS/pharmacy. "In addition to managing prescriptions, the mobile application will provide instant access to our flu shot scheduler, and even allow customers to plan shopping trips in advance using our mobile circular. In July 2011 - CVS/pharmacy is First National Retailer to Offer In-Store Photo Book and KODAK Picture Movie DVD “July 14 /PRNewswire-FirstCall/ -- CVS/pharmacy and Eastman Kodak Company (NYSE: EK) today announced that CVS/pharmacy is the first national retailer to offer customers both Photo Books and KODAK Picture Movie DVDs. These innovative photo processing products turn customers' photos into hard-cover books and movies in minutes using the KODAK Picture Kiosk   To celebrate this partnership, members of the CVS/pharmacy ExtraCare rewards program will have the opportunity to try these new products and get full credit for the product price, through a limited-time ExtraCare promotional offer.
• #19: The last example is Home Plus – TESCO in South Korea. They wanted to become the number one grocery store in South Korea without increasing their stores. So they came up with an innovative solution, creating virtual stores, initially rolled out in subway stations, allowing the shopper to use smart phones and QR codes to shop and then have those goods delivered when they got home. Results where 76% increase in new on-line shoppers an increase of over 133% in sales. Would expect to see this type of application in USA urban centers. In the Internet!   So in summary, what I tried to show you was different ways that the shopper was being served by both the CPG and retailer to connect with consumers and shoppers - early on to get insights to help in the product launch, providing in store benefits through mobile, community, couponing and connecting at the shelf - improving the shopping experience through store level category management tailored to the shoppers who shop that particular store and then lastly, an innovative retail store which is leveraging mobile and QR codes making existing wait time and location useful!
• #20: As we look forward we know that the US population is getting older, it’s becoming much more diverse, Hispanic and Asian, and the millenniums. Urban centers will continue to outpace rural centers.   In markets where new square footage is harder for retailers to find, retailers become obsessed with selling more to shoppers they already have. Serving a more diverse urban shopper is more complex and costly. Getting to and from the store is more difficult.   Americans are concerned about debt, rising gas prices and the economy! With greater shopper power, shoppers will expect and have more choices. One size fits all doesn’t seem to be the answer any more.   Recently Walmart announced several initiatives. One was to open hundreds of new small Walmart Express stores. The second was the expansion of their pickup today. Walmart announced the national expansion that allows customers to purchase merchandise online to pick it up on the same day free of charge at local stores. The goal of the program, which will be to expand to 3600 stores, is to increase foot traffic and create incremental sales opportunities at the brick and motor locations.
• #21: One of the most exciting developments this year have been the number of major announcements that will help connect the zero moment of truth with the first moment of truth.   The first, being the announcement by Walmart to share point of sale data after ten years of not sharing with the industry. Nielson will be working with Walmart, including their neighborhood market and Sam’s Club to report their sales information and incorporate it into existing reads of the marketplace. According to Cindy Davis, Executive Vice President of Walmart Global Customer Insights “we plan to share our point of sale information to help us identify category growth opportunities sooner and collaborate with our manufacturer partners to develop more impactful customer driven programs going forward.” Additionally, Walmart and the Symphony IRI Group plans to introduce a next generation web based shopper insights in collaborative planning platform called Customer Advantage. “The Customer Advantage Solution identifies and sizes opportunities among shopper segments, trips and categories that will better enable Walmart and it’s supplier-partners to grow their business through a deeper understanding of our customers,” .   Recently Amazon announced their Ad Network which will be a retargeting of customers based on Amazon purchase history. Amazon will begin purchasing internet ad space, and then re-selling to marketers at a premium. Amazon’s advantage is their vast data base of Amazon.com customer data which allows advertisers to better target their audiences based on buying habits.   Facebook and Nielson are teaming up to create the online campaign ratings system, the company best know for it’s rating system. The product is aimed at tracking and measuring online ads at the same level given to television ad campaigns which are currently the gold standard for media ads spending. Thanks to a new product from Nielson and Facebook the internet could become a first class citizen in the advertising world for good.   Proctor and Gamble, Demand Tec and Nielson are putting together a solution to allow P & G’s giant US marketing mix modeling business to get a faster read on their spend and how their performing. This represents a more real time and shift to a more continuous monitoring scenario planning from the old after the fact audit based approach.
• #22: The shoppers are going to want to be able to connect the dots – connect different applications and services across general themes like for instance health and wellness. Shoppers will assemble their own networks. If the application stores provide them with apps that can be integrated and personalized – like Instagram for photos! From a recent publication, The Future of Health and Wellness in Food Retailing, developed by the Institute for the Future for the Coca Cola Research Council- North America – they state “ bio-citizens are people networks based on biological or health similarities and who may engage in collective action based on their shared identities. The abundance of social networking tools in platforms now available online has facilitated the ability of people with similar health values or conditions to share and generate information, as a result food and health affinity groups are proliferating online. For example, Dailystrength.com, an online social networking site has health affinity groups which span interests and needs from food allergies, diabetes, new mothers and people with hypertensions.” Drugstores have established a wellness brand– Retailers and Manufacturers can provide in store nutritional advice, in store health monitoring, nutritional information packaging, QR codes. Consumers demand information beyond labels and packaging. A new recent development by Whole Foods has developed a program, developed by the company, by two physicians and a registered dietician, including a lifestyle evaluation, nutrition education, coaching, skill building classes, supper clubs with healthy four course meals and a 10% discount on food in the store. A recent announcement by General Mills is an e-commerce site they developed with Microsoft to build a direct consumer online channel called Gluten Freely, designed to help the consumers who have Celiac disease or are sensitive to gluten, a protein naturally found in certain grains. Social Network for Patients, Doctors and Caregivers A social network that doctors can prescribe to their patients: that's the idea behind a new San Diego startup called Wellaho. The company creates software to manage and support patients after they leave the hospital by bringing together different parts of a patient's support system. Doctors, family, and friends could all be part of the network, which can be customized for individual patients. Likewise – integration of Transportation – all forms interconnected and connected through social mobile – bus routes, dynamic parking availability, traffic – connected to store locations – making it easier for the shopper to get in and out in urban – on board and mobile systems – todays automobile is in the internet.
• #23: As the shopper lives in the internet - her experience will become much more personal. Mobility the primary new key ingredient of this sea change - social comes alive throughout the day - personalizing interaction in the internet and the way value will measured by the shopper. No more interruptions! Context!   Devices will be able to know where you are and what you are doing. Social mobile privacy is still evolving as evidenced by Apples recent announcement to do away with UID in the upcoming operation system - permission and opting in will help make this work. Honesty, Trust, Transparency, are critical and shopper relationships will go to those companies that live out these values!   Engagement and applications that learn about your preferences – learning and tailoring your interaction in real time - for example a new neural based navigational capability that was implemented for companies like Dell on-line by a company named 7Billion People.   From the recently published NRF Mobility Blueprint 2010: “The current “leading edge” mobile solutions for retail suggest that focusing on making the end user experience more personal and allowing retailers to take advantage of information in real time are the factors that are driving innovation and adoption.”   “As more devices around the world are equipped with a mobile wallet, the number of consumers carrying payment and loyalty cards electronically will also increase. Consumers benefit—their cards are not only secure, they are easily cancelled and replaced if lost: one call, text message, or remote application does it all. Retailers benefit—mobile wallets can help solve the critical problem of wallet share and represent opportunities to offer customers new incentives to purchase, new ways to purchase, and new ways to pay.   To achieve universal consumer acceptance, mobile processing must be standardized around the world. There is only one way to ensure that processing is the same everywhere, and that is by creating and adopting global standards. Fortunately, numerous organizations, such as GS1, the NFC Forum, ARTS, and the recently formed Isis project, are already working to develop and promote the necessary standards. This document will also continue to evolve to support the needs of retailers.” NRF Blueprint 2010
• #24: Given everything I’ve walked through with the shopper being in power, I believe there is a need for change. I believe this is a large change, not an incremental change in your business, but a fundamental change. Do you believe so?  How important do you believe the shopper is to you and your business? What priority do place on the shopper view? Given that most of the business models, today have been designed around pushed base thinking for territories and that the shopper is pulling information and is local, do you need to change your orientation in your company to use and leverage more pull based thinking and store level models and process execution? Pulling from the cloud – new information architecture? pulling from the internet of things!   What are the major processes in your business model that you consider with Shopper view? For example:  Innovation Platform & Shopper Input – Do you need to consider the shopper values in the development of new product offerings? Needs tied to lifestyle - Include them in the conceptualization of new product offerings?  Marketing Mix Moving to In Bound Marketing through Social & Mobile - Shift from interrupt marketing to in-bound engagement marketing? Understand and move to earned media and leverage social mobile marketing? Integrate social mobile with Retailer loyalty programs. Integrating and managing a fragmented and complex media - understand the marketing spend – the Investment of ROMI so that you can begin to measure!  New Product Introductions and Promoted Products Targeted through Shopper/Retailer Segments – Targeting and serving markets by focusing on shopper clusters and store level segmentations to improve new product adoptions and promotion spend performance – driving store traffic to strategic retail partners  Sales Retail Customers – Store Specific Information Highway – Build on Daily Data Daily POS Demand Data to create a fully transparent Retail Account and Store Specific Information Highway that specific joint local shopper programs can be developed, executed and measured. Develop faster in-market action. Make the highway social and mobile at store level! And leverage the recent information announcements previously discussed.  Move to Store Level Category Management – move from territory to cluster and store level planograms leveraging the store specific information highways – partnering and leveraging social, mobile to improve and perfect in-store compliance – Become store and shopper centric across your team.  Multi-Channel Shopper/Consumer Listening and Support –enhance customer support to incorporate a shopper perspective and listen across multiple channels. Actionize shopper’s voice throughout the shopper’s journey. Use private social communities to drive deeper understanding.  What are the implications for your company? Need for Social and Mobility culture and capability within your own organization? Change in shopper relationship?  So there is no point in trying to boil it all. Following are 3 suggestions for approaching the shopper’s rise to power and what I believe are focus areas to consider.
• #25: I’m going to make three suggestions in terms of initiatives I believe that can help you focus to move forward. Clearly, this is a fundamental change – not incremental or bolt on, which should be led by the business leadership.   Brand identity needs to be consistent across all channels – whether TV, social, mobile, store… extending the brand identity into social and mobile. Existing processes and systems in your organization were probably designed to push product and then apply levers to shape demand. Those practices are still important and relevant and should not completely disappear. Shopper engagement will now be context sensitive and operate in real time, however food processing and moving product and merchandising at the shelf cannot operate at the same speed. You will need to discover what practical innovations you can implement given real world manufacturing and distribution constraints. Coordinating all of the processes to win with the shopper will require setting appropriate expectations across the shopper, retailer, 3rd party ecosystems and internal organizations. This requires leadership to effect a cultural change. If you just move existing processes, applications and infrastructure to the cloud, you will gain some cost advantages, however, – the cloud provides a real opportunity to replace these old practices over time and become a business enterprise living in the internet through mobile and social. So first, I believe you need to develop a shopper model -a vision and business process model and information architecture around the shopper that aligns your brand strategies, shoppers, key accounts, channels, social and mobility strategies. “The next big idea might just be social commerce — the full integration of the retail store, the Web and mobile into one unified shopping experience”- Dominic Basulto, Washington Post – 8/30/2011  Second, aggregate new and existing signals around this idea of the shopper journey across your enterprise processes; leveraging leading, actual and leading indicators to respond to changing and unfolding shifts in the shopper markets along with the evolving associated social and mobile technologies. A new information architecture from the outside-in. And then third, conduct end to end pilots and build capabilities and a new culture to test with shoppers, retail customers and 3rd part ecosystem members, measuring the results and learning as the shopper grows into living in the internet. Alex Tosolini, Vice President Global E-Business for P&G refers to business life as a volatile, uncertain, complex, ambiguous world. He focuses on putting business ownership first to deal with these inherent issues before taking on the latest social endeavor. He recommends companies think about the business objectives and strategies first, and then on how social can support that. He recommends asking, “How well do I know the broad business challenges for this brand. Tosolini works to keep common sense at the forefront of all activities. Everybody’s speed of choice is just one click away Tosolini says. Consumers can make product decisions in a click. Retailers can change their product offerings online in an instance. Manufacturers can provide new content in a click. All this takes weeks or months in a store environment.”
• #26: The first suggestion is to develop a shopper business model framework, I’m assuming you have a corporate and brand strategy. I believe you need to develop a shopper strategy and a business model around the shopper that would typically include a set of integrated business processes from an outside in perspective As Dina Howell, Saatchi & Saatchi X states “Another aspect in which it evolved is that people used to focus a lot on the executional aspect of shopper marketing. Eventually they all ended up realizing that what really mattered was their strategy behind it. How the problems the shopper had would be strategically solved. This should be the focus long before tactics and execution, because in the end they will all be defined by strategy.” Think about social and mobile and its ability to understand and connect not from content only but context! So do you know who your shoppers are? Do you understand their journey by brand? By channel, retailer and store? The major point is to clearly understand and put in place a method for developing an understanding and insight of your shoppers and the shoppers of your strategic retail accounts you are going to focus on. For your shopper’s - do you have a mobile – social commerce strategy? Are you going to be able to leverage emerging in-bound marketing? Real time collaboration across shopper, retailers and ecosystem partners anytime, anywhere! Who truly are your strategic retail accounts? As discussed earlier - retailers and brands have fought for control of the shopper. Today Kantar Retail would assess this as the wrong way for these trading partners to frame this particular issue. Instead, the paradigm made famous by the US TV show “Lost” seems most appropriate here: “Live Together. Die Alone.” There are any number of sophisticated entities today looking to position themselves as a go-to resource for consumers/shoppers on virtually anything they need, and these entities (such as Google, Facebook, Twitter with no retail assets). Have you developed a trust relationship with your key strategic accounts? I think it is always important to look outside and understand what others are doing to improve shopper value. So perform an externalization and continue to monitor.   And then there are three focus areas that I believe are critical to partner with your retailer at the store level to win with the empowered shopper. The first is this idea around shopper marketing. The second is cluster/store level category management. And the third is this one version of the truth between you and the retailer.   Integration across these 3 areas within your company, with your retailers along the shopper journey at the store level - is the key to aligning and winning with the shopper. I will discuss these 3 focus areas on the next page.   You need to enable a Shopper/Store Team that can focus locally and be connected across organizations to enable this partnership. Social and mobile tools can help facilitate better teamwork and communications to improve speed of action and breakaway from old thinking. Suggest you investigate suggestion of Hub & Spoke organization structures – a great source on this would be Jeremy Oywang, Altimeter Group, http://web-strategist.com/blog And then do you have an IT strategy? How are you going to get from where you are today to be where you need to be to be able to support the emerging social-mobile – in the internet shopper? From R. Chang Constellation POV 8/30/2011 - Cloud is the store, mobile is the experience, analytics provides the brains and social is the network Given the real-time requirements for engaging with the shopper, and speaking the same language between CPG and Retailer - what are the data architecture requirements? MDM / new signals / Active enterprise / Big data? - You will need a new information architecture. Will current application software environment need to change? What Infrastructure needs to be in place? What is my mobile strategy? Across - B2C, B2B and B2E. A really good recent webinar –from Nick Jones, VP & Distinguished Analyst, Gartner (see appendix) – given the 3 types of mobility quality of experience – Text, Web and Native – what will your shopper marketing strategy require? - this approach will help drive the IT shopper mobility platform required. So, again, what is the shopper profile and quality of experience with the shopper you are trying to engage? Strongly suggest the development of an IT Strategy and Blueprint to include your shopper strategy.
• #27: Winning with the shopper at the local level is going to require strong partnership with the manufacturer and the retailer. Kantar 5 - Retailers and suppliers, to retain shopper engagement, will be working hard on solutions that are operationally efficient, financially rewarding, and engaging to the shopper. Getting this combination right will take both hard work and a far more integrated approach among marketing, creative, finance, and retail than most suppliers have had in the past. You should introduce an integrated team at the store level that leverages social and mobile across these three shopper centric areas.   As I suggested there are three major areas I believe you should focus on to win with the shopper at the local level. Number one is this idea around shopper marketing and shopper journey. Supplier and Retailer along with 3rd parties involved in extended ecosystems will need to orchestrate and execute flawlessly across various media and in-store marketing campaigns. Access to the shopper is now going more and more through social networks – both manufacturers and retailers need to connect with the shopper through these new communities. Enlist through social mobile! - So connecting with the shopper – helping her and informing her and creating the desire for her to buy your brand at that particular retailer store – and then for her to be able to share that experience – that local experience with her friends and others, and other local shoppers. Loyalty programs that connect both out of store and in-store with the shopper are gaining appeal – social networks and mobile make this even more attractive. Second, connecting at the shelf, this idea of being able to realize the first moment of truth at that particular store – at the store level, making it easier for the shopper to see the value you are presenting and insuring that the product is in fact in stock and at the shelf when she is ready to buy. Connecting your shopper marketing activities to your store level category management is critical in order to deliver against the decision to purchase at both zero and first moments of truth. So both merchandising and demand planning moves to a lower level of granularity – at the store level – and the speed to respond to real time shelf activity and conditions becomes the challenge. for suppliers as they innovate is to incorporate shelf-level economics into their innovative thinking. In particular, it’s imperative to understand one key fact: how any innovation a supplier brings to a customer improves their overall shelf economics better than replacing a SKU with private label. And third, the development of one version of the truth between the manufacturer and the retailer – right – so that both of you are speaking the same language in terms of how you determine your products, SKUs, k – what a perfect order is, k- what the planogram needs to look like and the ability to execute around compliance. So, these three areas, I think will help make the process of shopping easier, more desirable and the choices clearer for the shopper, and at the end of the day, buy more.
• #28: With the shopper in the internet, always being on, and looking at her journey, now how do these three focus areas map up against them? So what I’ve done is I’ve created a typical shopper journey, the new shopper journey, and I’ve drawn from several sources that are listed in the appendix which you can get the links for. The first being Google’s Winning the Zero Moment of Truth E-book. The second, from Microsoft and Carrot the New Shopper, Today’s Purchase Plan and the Media Which Influences It. The third being Unilever’s Trip Management Study, one which I mentioned earlier and then a second The Hispanic Shopper. fourth, a recent study developed by Campbell Soup. And then the fifth, Shopper Marketing 4.0, GMA, Grocery Manufacturers of America and Booz 2010. Looking at this Shopper Journey – a new moment of truth – a stopover between stimulus and first moment of truth has emerged as a key influencer in moving from undecided to decision and is now the expected not an exception. This step is the zero moment of truth and from a recent study by Google – “In our study, Shopper Sciences 2011 Macro Study 84% of the shoppers said that ZMOT shapes their decisions. It’s now just as important as stimulus and FMOT in moving consumers from undecided to decided.” “It Includes products across the spectrum. Recipes make up 1% of all searches on Google, in fact ZMOT becomes even more important when money is tight. Couponing on-line and researching what her friends have said!” So the two questions that everybody is trying to answer is: how do I get on the shopping list at home and how do I get in the basket at the store? Campbell Shopper Study - 2011 So if you look at this shopper journey and the initiatives that I’ve talked about – Shopper marketing, store level category management and CPG/Retailer Information Highway “one version of the truth”   Shopper Marketing maps to the zero moment of truth – as she is home, on-the-go and enters the store – both digital search social mobile commerce and traditional shopper marketing techniques that are personalized to make it on the shopping list and selection of the store format (retailer brand) – time of day and trip type.   Store Level Category Management and Information Highway are primarily mapped to the “First Moment of Truth” – the shelf merchandizing, planogram and in-store couponing all meeting her expectation at the shelf in the store of her choice. Both CPG and Retailer receive daily feedback on product performance through point of sale and can make real time adjustments to both marketing and replenishment requirements to ensure compliance against shopper expectations. Shopper Marketing maps again to the “Second Moment of Truth” as both shopper and consumer she connects to her communities and shares her experience and her families experience with the product, her shopping experience – both positive and not so positive evaluations providing input for all other shoppers in her communities and in public communities making a new zero moment of decision.
• #29: The second major suggestion that was shopper signals, aggregating the signals and integrating them. There are many new signals that are being made available to various sources. And the suggestion is that we are living in a new environment that requires a new way of thinking. As Yvonne Genovese, VP Distinguished Analyst from Gartner has stated: “in the current environment we have been focused on what happened and why. Now business leaders want to know what is happening right now and what is likely to happen- more in real time. Emerging information across social, mobile, voice and video – that is big data and understanding the patterns across these information streams is the new opportunity in big data.”   So if we begin to look at the idea around connecting the shopper, her journey and across your enterprise processes we have several new signals that have been emerging. We have real time data rivers coming from shopper - social, mobile, and stores - traffic, POS and syndicated sources – SymphonyIRI, Nielsen , and can now aggregate and integrate them use them to improve new product launches and adoptions, promotions through big data cluster analysis – both from a replenishment and campaign management perspective at the store level. Vala Afshar, Chief Customer Officer, Enterasys part of Siemens – managing Network routers, switches telephones, wireless gear – machines talking to us – expect the machine to tell us when it is misbehaving that can be acted on – crisis prevention not crisis management! Especially relevant in applications to real-time supply chains! Mobile social commerce, when you look at mobile phones, essentially they are a sensor platforms, two way communication devices between you and the shopper and their personal lives. We can now engage in real time with shoppers on a personal basis throughout the shopping journey.   When we talk about the new signals, we are also talking about listening to the shopper, and learning about her shopping and product experience. Becoming a social enterprise! What is in the public domain about your products should be monitored, understood and acted on. Listening capabilities are very different from the data management query we perform with current transactional systems. Listening and engaging is the big change!   All of this has to be coordinated and integrated in order to be successful at the shelf. So the ability to have one version of the truth – that first moment of truth – the ability to have a repository that allows you to win at the shelf and be able to have a closed loop system will be highly dependent upon your ability to take these new signals with existing signals, aggregate, integrate and make them visible across CPG/Retail and 3rd party ecosystem participants at the store level.   From a recent IBM publication – The Future of the Consumer Products Industry “CP companies need to determine the best option for capturing, harmonizing and transforming the various streams of demand signal, operational and shopper behavior data. Some are already integrating this data into their category management, trade promotion management, supply chain forecasting and planning, sales and operations planning, and retail store operations applications in order to improve store operations, better target shoppers, and create new in-store experiences.”   Shopper profile! New social enterprise data base! I’m going to speak more about this in the next slide, in terms of mapping this to the shopper journey.
• #30: Operating at the store shelf level with the shopper – what I’m going to do is walk you through an example of how new and existing signals can be aggregated and integrated to serve the shopper and jointly, both CPG and retailer better manage the business. The first example is the leading indicator that’s emerging around this idea of leveraging social media, clustering the media and then being able to analyze it in a way that can be used in a predictive fashion. Companies like Aster, Teradata, Autonomy and now a recent start up Wise Window has shown the predictive value of cluster analysis by applying it to the social media content. Dan Woods wrote an article recently in Forbes, The Predictive Power of Social Media, and you can find that link in my appendix. One of the examples in using social media in cluster analysis is when you introduce a new product so that you can predict the activity around and interest around that new product. What your mind share is before the product launch, during the product launch, whether or not the intensity has increasing or is it going stale, and examine the strength of the product categories. Being able to focus this capability on targeted stores areas will help in improving forecasts and adjusting both replenishment and campaign spend and tactics. Next we move on to signals being integrated and aggregated for analysis at the store shelf level and running and operating your business there. So existing signals like SKU shipments along with signals around store traffic –(day and time of day) becomes a lot more important because you are measuring the activity at the shelf and store level. You will want to know what time of day shoppers are coming in to help you determine what type of trip they are taking, what type of shoppers are coming into that particular store, whether or not those trips occur in any kind of a spike during the week, how many bought your brand of those shoppers who came in, so what is your share of the shoppers that come into the door? Now that the shoppers are engaged and instantly available, you can include the shopper as part of your store level team – helping you with eyeballs at the shelf and providing feedback on planogram and stock compliance. “Some retailers have even enlisted the help of their consumers to retrieve competitors’ pricing using third-party apps that award the customer for taking a snapshot of a product display or scanning the bar code of an item on sale at a competitor’s location.” NRF Blueprint 2010 And then last, point of sale data is an after the fact demand signal that can be used, of course, for replenishment and then additionally to help you measure performance of your marketing efforts so that you can redirect campaigns if necessary and spend dollars where those dollars are getting more lift and success. From Kantor Retail Study – “Share of wallet over time Even though thinking about share of wallet over time may be more difficult to conceptualize than share of occasions or share of basket, it is no less important. The relationships that retailers continue to develop over time are changing the nature of shopping decisions, as they are able to deliver “relationship-based value” rather than “transaction-based value.” Retailers with loyalty programs continue to have the greatest ability to leverage this. The “Atlantic” drug chains with established loyalty programs— CVS in the US, Shoppers Drug Mart in Canada, and Boots in the UK—have begun changing the very nature of value as something that is maximized over time, and maximized the more the shopper spends with the retailer. “   As the shopper reaches the second moment of truth and they begin to share their comments about the product and about the shopping experience – so using this feedback to act on issues immediately by the Store Team to correct operational issues, product issues and resolve shopper/consumer issues is critical in building relationship. Not enough to let her speak – need to act! Additionally, evaluations can be included in search results for new shopper “zero moments of truth” and social media cluster analysis can help surface unknown-unknowns in the form of unmet needs. When clusters form around complaints about specific problems or lack of functionality, they can be seen as a feature request and incorporated back into the existing product or a new product to be introduced by the CPG manufacturer or change in terms of the layout of the shopper shelf.  
• #31: So my last and third suggestion is to begin to implement this across your organization through a process that I would suggest of testing measuring and learning. Realizing of course that the world is going to unfold in a way that we can’t predict. So I believe that with these evolving new ecosystems, shopper power and with the pace of changes in technology, that as an organization, you should focus on being adaptable and flexible. Your organization will need to become social and mobile just as organizations became web savvy. To the degree that you can be adaptable and not hard wire your processes and systems – this will help you be successful over time. Second, I think it is critical to remember that doing the front end – the digital marketing, shopper marketing, inbound marketing, is all about getting on the shopper’s list, but the ability to manage at the store level and to be able to deliver against that promise, I think, is equally as important and probably, if not more complex. So my suggestion is to build out capabilities that allow you to bridge and connect those two moments – the zero and the first moment of truth with closed loop feedback. And then you need to have someway to measure the results, so that over time you are changing the behavior in the mindset of the people in your organization and creating positive reinforcement to change this behavior. Your asking an entire organization to be thinking different and be thinking in a different way, all across your enterprise, everything from how you think about products in terms of the shopper, how you think about the market at a store level, in terms of how you launch, how you think about selling and marketing these products through shopper inbound marketing, how you actually replenish and execute at the store level through store level category management, for both you and the retailer. And then, of course, how you listen and support the shopper and be able to feed that back into a new zero moment of truth. So putting that capability in place and reinforcing that kind of a mindset will be critical to the overall success of being able to win with the shopper going forward. Predictive analytics will require you to be able to put in place real time capabilities in terms of real time data processing, big data processing, and being able to target at a much more granular level. So I think the ability to leverage this information and act on things in real time, rather than this slow pushed base type cycle of plan and execute will be a requirement of business pilots you trial. From IBM CP Study - Core change management issues surrounding store, field sales, and third-party merchandiser staffing, timeliness of information sharing and supply chain flexibility (i.e., ability to redirect shipments and produce/ship to demand) continue to pose challenges. CP companies must adopt a holistic and pragmatic approach to collaboration, converting pilots and proofs of concepts with forward-thinking retailers into everyday ways of working. That my suggestion would be to create end-to-end type pilots, something that would give you the breadth and depth to test out the shopper journey from beginning to end, using social and mobile with store level teams, across a brand, across a particular account at the store level, and then be able to take those learning’s and apply those and begin scale this across your organization.
• #32: One - shopper power is growing and accelerating and therefore, there are significant implications to both the CPG and retailers. In fact, I think this presents an opportunity for both to focus on the shopper and create store teams to work in a more collaborative and cooperative fashion to win with the shopper.   Second, the reason the shift is occurring is primarily because of emerging social and mobility technologies. The shopper is in the internet and not just on the internet any longer. From internet content to internet content and context!   And then, third, integration of marketing, sales and operations aligned to the shopper journey by brand will be critical to win at zero and first moments of truth – performing the in store retail compliance will require a new level of partnership and focus for both CPG and Retailers.   I think in ending, new innovation will be driven by insights and shopper understanding that develops through these efforts because now you are operating at the level of the shopper, the one that has the decision whether or not to buy your product or not.   Hopefully this presentation has been helpful and I have presented something you can use, Please comment and share with others - and feel free to contact me - I can be reached at [email protected] or my twitter account at @KeithScovell. Thanks!